UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 14, 1999
GROW BIZ INTERNATIONAL, INC.
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(Exact Name of Issuer as Specified in Charter)
Minnesota 0-22012 41-1622691
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(State or Other Jurisdiction or (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification Number)
4200 Dahlberg Drive, Golden Valley, MN 55422-4837
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(Address of Principal Executive Offices)
(612) 520-8500
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(Registrant's Telephone Number, Including Area Code)
ITEM 5. Other Events
On October 14, 1999, Grow Biz International, Inc. announced that it recorded an
$11.6 million restructuring charge relating to the Company's It's About
Games(TM) concept. The charge primarily relates to discontinuing operations of
the sixty Company-owned It's About Games(TM) stores.
This event is further described in the Press Release dated October 14, 1999,
which is incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated October 14, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GROW BIZ INTERNATIONAL, INC.
Date: October 21, 1999 By: /s/ K. Jeffrey Dahlberg
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K. Jeffrey Dahlberg
Chairman and Chief Executive Officer
Date: October 20, 1999 By: /s/ David J. Osdoba, Jr.
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David J. Osdoba, Jr.
Vice President of Finance and Chief
Financial Officer
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GROW BIZ INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
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September 25, 1999 December 26, 1998
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ASSETS
Current Assets:
Cash and cash equivalents $ -- $ 2,418,000
Trade receivables, less allowance for doubtful accounts of
$1,019,000 and $1,053,000 8,671,600 13,893,700
Inventories 6,949,800 10,124,400
Prepaid expenses and other 6,919,300 2,459,300
Deferred income taxes 1,699,100 1,699,100
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Total current assets 24,239,800 30,594,500
Notes receivable 1,505,300 1,208,600
Property and equipment, net 4,729,300 5,960,500
Restructuring asset held for sale 111,900 --
Other assets, net 1,929,100 5,377,300
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$ 32,515,400 $ 43,140,900
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable 5,164,400 11,306,600
Accrued liabilities 1,131,000 1,818,700
Accrued restructuring liability 4,643,500 --
Current maturities of long-term debt 7,680,900 14,464,300
Deferred franchise fee revenue 1,280,300 1,901,800
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Total current liabilities 19,900,100 29,491,400
Long-Term Debt 8,764,000 3,484,600
Shareholders' Equity:
Common stock, no par, 10,000,000 shares authorized,
5,329,795 and 5,079,055 shares issued and outstanding -- --
Retained earnings 3,851,300 10,164,900
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Total shareholders' equity 3,851,300 10,164,900
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$ 32,515,400 $ 43,140,900
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GROW BIZ INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
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Quarter Ended Nine Months Ended
September 25, September 26, September 25, September 26,
1999 1998 1999 1998
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REVENUE:
Merchandise sales $ 11,223,300 $ 16,638,500 $ 34,165,600 $ 54,037,000
Royalties 4,755,700 4,688,700 14,391,100 14,574,700
Franchise fees 500,600 940,900 1,478,800 2,488,400
Advertising and other 194,000 215,900 438,200 505,000
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Total revenue 16,673,600 22,484,000 50,473,700 71,605,100
COST OF MERCHANDISE SOLD 9,846,500 13,451,700 29,195,400 44,210,500
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 7,160,800 6,541,600 21,541,100 22,082,000
RESTRUCTURING CHARGE 11,575,300 -- 11,575,300 --
GAIN ON SALE OF DISC GO ROUND -- -- -- 5,231,500
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Income from operations (11,909,000) 2,490,700 (11,838,100) 10,544,100
INTEREST INCOME 61,800 125,100 284,000 345,100
INTEREST EXPENSE (391,200) (143,500) (1,171,900) (351,400)
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Income before income taxes (12,238,400) 2,472,300 (12,726,000) 10,537,800
(BENEFIT) PROVISION FOR INCOME TAXES (4,797,500) 969,200 (4,988,600) 4,130,900
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NET INCOME (LOSS) $ (7,440,900) $ 1,503,100 $ (7,737,400) $ 6,406,900
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NET INCOME (LOSS) PER COMMON SHARE -
BASIC $ (1.43) $ .27 $ (1.50) $ 1.09
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WEIGHTED AVERAGE SHARES OUTSTANDING -
BASIC 5,218,600 5,614,600 5,159,200 5,861,300
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NET INCOME (LOSS) PER COMMON SHARE -
DILUTED $ (1.43) $ .26 $ (1.50) $ 1.06
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WEIGHTED AVERAGE SHARES OUTSTANDING -
DILUTED 5,243,000 5,846,800 5,183,600 6,054,700
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